Power distribution companies were continuing supplies to the influential defaulters, who owed Rs375 billion and that triggered the energy crisis and put PSO on the verge of financial collapse. STOCK IMAGE
The government has decided to task the National Accountability Bureau (NAB) with recovering Rs100 billion from the chronic defaulters among power consumers in an effort to bail out Pakistan State Oil (PSO), which has been badly hurt by inefficiency and poor governance in electricity distribution companies.
The move comes following acute shortages of petrol in cities of Punjab primarily in the wake of delay in imports by PSO, which has failed to bring supplies due to financial strain.
“The government will engage NAB in order to recover at least Rs100 billion from the defaulters, take action against the people responsible for continuous power supply to the defaulters and ensure recovery of electricity bills,” said an official while talking to The Express Tribune.
“No one seems to be pointing the finger at the heads of power distribution companies, who are holding the posts temporarily and may have been directly responsible for the collapse of the energy chain,” the official remarked.
Rather than taking action against the people responsible, the government’s axe fell on officials of the petroleum ministry and the managing director of PSO, who were suspended for face-saving.
According to sources, the power distribution companies were continuing supplies to the influential defaulters, who owed Rs375 billion and that triggered the energy crisis and put PSO on the verge of financial collapse due to the inability of power producers to clear their fuel bills.
Power plants have to pay Rs200 billion to PSO, but due to the huge money stuck in the energy chain by power distribution companies, PSO is facing default on payments to domestic and international oil suppliers.
According to officials of the Ministry of Water and Power, Rs375.181 billion was outstanding against electricity consumers in the private sector, of which Rs137.144 billion was owed for the last one to three years or before.
The distribution companies have failed to clear Rs220 billion worth of bills of power producers, which in turn could not pay fuel bills of PSO.
Officials said PSO was facing cash constraints as its receivables from all clients touched Rs224 billion, of which power companies owed Rs200 billion.
Owing to PSO’s inability to make payments, international banks have blocked the letters of credit (LCs) opened by the company for oil imports worth Rs110 billion.
Earlier in the second week of December, PSO had cautioned the federal government that the company had failed to clear five LCs after delay in payments from oil purchasers, particularly power generation companies.
In an attempt to cope with the financial crunch, PSO issued an SOS request to the prime minister and the ministries of finance, petroleum and water and power, asking them to release Rs100 billion immediately, but no major amount could be provided so far.
The company also highlighted that international oil suppliers were reluctant to provide fuel without advance payment.
Published in The Express Tribune, January 21st, 2015.
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